We normally trade currency pairs such as GBPEUR, NZDUSD, USDJPY and EURUSD (among others). How do you tell which one of the pair is doing what? It’s not easy to determine because the currency pairs form a ratio.
In NZDUSD, you can’t really tell if the USD is weakening or strengthening because the movement of price also depends on NZD. The following is not perfect – it’s what I do.
I would compare NZDUSD to EURUSD on separate or the same chart. Both these pairs have the same USD denominator. If USD is ‘the’ common denominator, then I can better gauge what’s happening NZD or EUR. See some comparisons below and in the video.
Comparisions of Indicies can be useful to better select opportunities.